Democratic Sens. Russ Feingold (Wis.), Chris Dodd (Conn.), and Bob Menendez (N.J.) told oil companies Wednesday that they wanted answers as to why oil companies are not drilling for oil on the 68 million acres of land they already lease from the federal government.

I don’t think that Chairman Bernanke knows how the economy will continue to behave. As you saw, he is not answering the question regarding whether or not we are in a recession. But it is clear to me that actions taken by the Fed, like cutting rates, are not working. Oil prices are a consequence of a weak dollar policy that this administration has been implementing, and that has a lot to do with food prices and the housing crunch that we are seeing in this country. It’s not very encouraging. I think that we haven’t seen it all.

We have to consider the 30 years of stagnant wages that your average Americans have had to face. That fact is that the reason we have people refinancing their homes, getting home equity loans, getting high rate interest credit cards and petty loans is because wages have been flat. We need to pursue a higher wage strategy. Humphrey-Hawkins required that the Fed not only try to maintain loan inflation, but also increase full employment. Full employment, with the increased productivity rates that we would experience, would have meant that people would have been making more money. If people would have been making more money, people would not be in the difficult, dire straits that they are in today. I think that we have to look beyond just the current crisis in to the larger framework.

Perhaps the only silver lining to the ominous cloud that is the federal government’s proposed bailout of Fannie Mae and Freddie Mac is that this looming catastrophe presents a much-needed opportunity to reevaluate the role of Government-Sponsored Enterprises (GSEs) in financial markets.

Between the proposed $300 billion giveaway to Fannie Mae and Freddie Mac and legislation to fatten the Federal Housing Administration’s (FHA) loan portfolio, Congress and the President could soon be saddling taxpayers with more than half a trillion dollars in new liabilities – nearly $2,000 for every American. What was once an implicit taxpayer guarantee will be wholly explicit, and the government could for the first time be involved in both owning shares of and lending to GSEs. Read the rest of this entry »

As far as Chairman Bernanke, I think he’s probably been very forthright with us right from the beginning when he first came on to the job. The questionings that we’ve seen are, “How did we miss all this? How did we get into this position?”. I have always looked at it as a perfect storm. The housing started to go sour at the same time as when oil prices started to go up. You had a number of forces all working together.

Obviously, on the financial side of it, we are going to be doing regulations. We are working with Bernanke. He agrees with a lot of things that we, as a Congress, are doing and that Barney Frank wants to do. But this doesn’t happen or change overnight. The statement that I heard him make was that right now, his main concern, and I do believe that it’s the correct way to go, is to stabilize the banking market so that everything else can calm down, like the stock market, and bring confidence back to the American people.

With that, then we’re going to start working on some of the other problems that this nation is facing. But we’ve gone through this before. It’s painful for a lot of people, myself included. I look at my retirement account going down, down, down, down. That’s very nerve wracking for many people in my age. But with that being said, we’re Americans. We’ll pull through it, and we’ll be better for it.

Today is “Cost of Government Day,” the day on which the average American worker has earned enough money to “pay off his or her share of spending and regulatory burdens imposed by all levels of government, federal, state, and local,” according to an analysis by the taxpayer watchdog organization, Americans for Tax Reform (ATR).

Our nation’s hard-working taxpayers have worked this year from January until today to pay of Washington’s wasteful spending habits. That is simply unacceptable. And to make matters worse, Washington’s out-of-control spending is growing. “Cost of Government Day” keeps getting later — four days since 2007 – and Americans keep having to work longer to feed Washington’s insatiable appetite for spending other people’s money. Read the rest of this entry »

Chairman Bernanke continues to demonstrate that he has a good handle on his job, and understands a very broad picture of where the American economy is as well as the world economy. Secretary Paulson understands the workings of Wall Street and what has to be done to keep things stable.

Financial markets are built on confidence. You put your money in the bank, confident that the bank will be able to pay it back. You lend money, you buy stocks, and you conduct your finances on the basis of confidence in the regularity of the market. The Treasury is taking steps to shore up not only national but international confidence in the American financial system. The hazard of having that confidence disappear is too great to not be supportive of Secretary Paulson’s proposal.

We’ve ridden a bubble in housing, and prices went far higher than they should have. The bubble has burst, and they’re coming back down. Eventually, housing prices will reach a place where the millions of people who are renting today are going to want to buy a house. The importance of what we’re trying to do here is to make sure that when prices bottom out, there’s a mortgage market, that there’s a banking system in place to actually support that kind of purchasing activity. The role that Freddie and Fannie have played as we ride this bubble down is to turn it around, and they’ll have an equally important role as we rebuild our housing economy. I’m a little concerned about the idea of taking away any limit to the line of credit from the Treasury. I’m not sure that’s wise. I can see why it shouldn’t be just “nickeled and dimed,” with incremental increases, but we might want to take a closer look at that.

Somebody was asleep at the switch to get to this point, as far as I’m concerned.  I don’t know who to put that on.  I don’t know who to blame that on, whether it’s Bernanke, or Paulson, or Cox, or somebody else.  It’s probably somebody else, quite honestly.  But right now, there are a lot of questions that are unanswered.  There haven’t been a lot of answers to what has been asked on either side of the aisle.  And so it’s a bit frustrating at this point.

I think we need more regulation, probably, but it just depends on how it’s structured.  I mean, more regulation for the sake of regulation isn’t what we’re after.  As far as giving [Paulson] a blank check—anybody a blank check, including myself—I’m a little nervous about that.

I thought the hearing was good insofar as it’s setting the predicate for going into regulatory reform, which I think both the witnesses agreed is necessary. And of course, the Secretary discussed some of their recommendations from the Study Group. But our biggest problem today was that the session is now running out and the Congress is about to adjourn. And [given] the distance between now and March or April of next year, with the economy in this unstable position it’s in, [we need to consider] whether or not we should take any action to give emergency powers to bridge this hiatus. I’m not sure. I’m not sure they’re sure of the answer. But I thought there was a tacit agreement between those of us on the Committee [on Financial Services], the Secretary, and the Chairman that we didn’t want to quite discuss that question and those eventualities in public in light of what’s happened in the market. So we’ll take those up in a more confidential setting. Read the rest of this entry »